This review article discusses the state of economic flood damage assessment and identifies research directions. Flood damage assessments are crucial for decision support and policy development in natural hazard management and climate change adaptation. Despite progress in data collection, analysis, and model development, there is a mismatch between the relevance of damage assessments and the quality of available models and datasets. Simple approaches are often used due to data and knowledge limitations. Damage assessments depend on many assumptions, such as spatial and temporal boundaries, and there are pitfalls in economic evaluation, such as the choice between replacement costs and depreciated values. More effort is needed for empirical and synthetic data collection and for providing consistent, reliable data. A major shortcoming is the lack of model validation. Uncertainty analyses and thorough scrutiny of model inputs and assumptions should be mandatory. Flood risk assessments are often not well balanced, with more attention given to hazard assessment than damage assessment. Advances in flood damage assessment could trigger methodological improvements in other natural hazard areas. Flood damage assessments are needed for: (1) assessing flood vulnerability, (2) flood risk mapping, (3) optimal decisions on flood mitigation measures, (4) comparative risk analysis, (5) financial appraisals for the insurance sector, and (6) financial appraisals during and immediately after floods. Flood damage assessments are essential for flood risk management but have not received much scientific attention. Compared to flood hazard methods, flood damage data are scarce and damage estimation methods are crude. This lack frequently leads to transfer of damage data and models without sufficient justification. Flood damage can be classified into direct and indirect damages, further divided into tangible and intangible. Tangible damages are those that can be assessed in monetary terms, while intangible damages are difficult to quantify. Damage assessments are performed on different spatial scales: micro-scale, meso-scale, and macro-scale. The results depend on the spatial and temporal boundaries of the study. The classification in micro-, meso- and macro-scale has no clear-cut boundaries, and different analysts may set the boundaries differently. The choice of spatial and temporal boundaries depends on the purpose, required reliability, available data, and resources. Economic evaluations of flood damages are purpose-related and context-dependent. The rationales of economic evaluation differ in disaster relief, insurance contracts, and public policy decisions. Four basic principles of economic evaluation should be obeyed: (1) define the appropriate time and spatial boundaries, (2) evaluate all tangible costs, including the cost of emergency services, (3) use depreciated values, not full replacement costs, and (4) never sum up stock and flow values for one element at risk. Direct monetary damages are assessed through three steps: classification of elements at risk, exposure analysis and asset assessment, and susceptibility analysis. The classification of elements at risk is based on economic sectors, such as private households, companies, infrastructure, and agriculture. Exposure analysis identifies objects affected by a flood scenario and estimates asset values. Susceptibility analysisThis review article discusses the state of economic flood damage assessment and identifies research directions. Flood damage assessments are crucial for decision support and policy development in natural hazard management and climate change adaptation. Despite progress in data collection, analysis, and model development, there is a mismatch between the relevance of damage assessments and the quality of available models and datasets. Simple approaches are often used due to data and knowledge limitations. Damage assessments depend on many assumptions, such as spatial and temporal boundaries, and there are pitfalls in economic evaluation, such as the choice between replacement costs and depreciated values. More effort is needed for empirical and synthetic data collection and for providing consistent, reliable data. A major shortcoming is the lack of model validation. Uncertainty analyses and thorough scrutiny of model inputs and assumptions should be mandatory. Flood risk assessments are often not well balanced, with more attention given to hazard assessment than damage assessment. Advances in flood damage assessment could trigger methodological improvements in other natural hazard areas. Flood damage assessments are needed for: (1) assessing flood vulnerability, (2) flood risk mapping, (3) optimal decisions on flood mitigation measures, (4) comparative risk analysis, (5) financial appraisals for the insurance sector, and (6) financial appraisals during and immediately after floods. Flood damage assessments are essential for flood risk management but have not received much scientific attention. Compared to flood hazard methods, flood damage data are scarce and damage estimation methods are crude. This lack frequently leads to transfer of damage data and models without sufficient justification. Flood damage can be classified into direct and indirect damages, further divided into tangible and intangible. Tangible damages are those that can be assessed in monetary terms, while intangible damages are difficult to quantify. Damage assessments are performed on different spatial scales: micro-scale, meso-scale, and macro-scale. The results depend on the spatial and temporal boundaries of the study. The classification in micro-, meso- and macro-scale has no clear-cut boundaries, and different analysts may set the boundaries differently. The choice of spatial and temporal boundaries depends on the purpose, required reliability, available data, and resources. Economic evaluations of flood damages are purpose-related and context-dependent. The rationales of economic evaluation differ in disaster relief, insurance contracts, and public policy decisions. Four basic principles of economic evaluation should be obeyed: (1) define the appropriate time and spatial boundaries, (2) evaluate all tangible costs, including the cost of emergency services, (3) use depreciated values, not full replacement costs, and (4) never sum up stock and flow values for one element at risk. Direct monetary damages are assessed through three steps: classification of elements at risk, exposure analysis and asset assessment, and susceptibility analysis. The classification of elements at risk is based on economic sectors, such as private households, companies, infrastructure, and agriculture. Exposure analysis identifies objects affected by a flood scenario and estimates asset values. Susceptibility analysis